Friday, September 28–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
World stock markets were mostly lower overnight. U.S. stock
indexes are pointed toward weaker openings when the New
York day session begins. There is still little risk
aversion in the marketplace at present, as evidenced by
recent strength in the U.S. stock market that sees the
major indexes not far below their recent record highs.
Today is the last trading day of the week, of the month,
and of the quarter, which makes it an extra important day
from a technical chart perspective. Also, late this week
could be seeing portfolio and fund managers squaring their
positions for “window-dressing” purposes as the month and
the quarter wind down.
In overnight news, inflation in the Euro zone heated up a
bit. Consumer prices in the region rose at a 2.1% annual
rate in September. The reading was the highest in a year
and a half.
Focus in Europe is on the new Italian government’s economic
plans to address its fiscal and financial problems, which
are required by European Union law. Many believe Italian
lawmakers won’t comply with EU rules on the matter. The
Euro currency is pressured late this week on reports Italy
will delay its fiscal and economic projections. This matter
could be the next flash point in the currency and financial
markets.
The key outside markets today find the U.S. dollar index
higher on a big rebound from recent selling pressure.
Greenback bulls are now right back in business. Meantime,
November Nymex crude oil prices are slightly higher and
trading just above $72.00 a barrel.
U.S. economic data due for release Friday includes personal
income and outlays, the ISM Chicago business survey, and
the University of Michigan consumer sentiment survey.
–Jim
U.S. STOCK INDEXES
December S&P 500 e-mini futures: Prices are slightly lower
in early U.S. trading. The bulls still have the firm overall
near-term technical advantage. The shorter-term moving
averages (4-, 9- and 18-day) are neutral early today. The 4-
day moving average is below the 9-day. The 9-day is above
the 18-day moving average. Short-term oscillators (RSI, slow
stochastics) are bearish early today. Today, shorter-term
technical resistance comes in at the overnight high of
2,924.25 and then at this week’s high of 2,936.00. Buy stops
likely reside just above those levels. Downside support for
active traders today is located at this week’s low of
2,907.50 and then at 2,900.00. Sell stops are likely located
just below those levels. Wyckoff’s Intra-day Market Rating:
4.5
December Nasdaq index December futures: Prices are lower in
early U.S. trading. Bulls still have the firm overall near-
term technical advantage. Shorter-term moving averages (4-
9-and 18-day) are bullish early today. The 4-day moving
average is above the 9-day and 18-day. The 9-day average is
above the 18-day. Short-term oscillators (RSI, slow
stochastics) are neutral early today. Shorter-term technical
resistance is seen at this week’s high of 7,686.25 and then
at 7,700.00. Buy stops likely reside just above those
levels. On the downside, short-term support is seen at
Thursday’s low of 7,586.00 and then at 7,550.00. Sell stops
are likely located just below those levels. Wyckoff’s Intra-
Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES
December U.S. T-Bonds: Prices are firmer on more short
covering after hitting a four-month low Tuesday. Bears still
have the overall near-term technical advantage as a four-
week-old downtrend is in place on the daily chart. Shorter-
term moving averages (4- 9- 18-day) are neutral early today.
The 4-day moving average is above the 9-day. The 9-day is
below the 18-day moving average. Oscillators (RSI, slow
stochastics) are bullish early today. Shorter-term technical
resistance is seen at 141 16/32 and then at 141 24/32. Buy
stops likely reside just above those levels. Shorter-term
support lies at the overnight low of 140 19/32 and then at
140 8/32. Sell stops likely reside just below those levels.
Wyckoff’s Intra-Day Market Rating: 6.0
December U.S. T-Notes: Prices are higher on more short
covering after hitting a four-month low on Tuesday. Bears
still have the overall near-term technical advantage.
Prices are in a four-week-old downtrend on the daily bar
chart. Shorter-term moving averages (4- 9- 18-day) are
neutral early today. The 4-day moving average is above the
9-day. The 9-day is below the 18-day moving average.
Oscillators (RSI, slow stochastics) are bullish early
today. Shorter-term resistance lies at this week’s high of
118.31.5 and then at 119.08.0. Buy stops likely reside just
above those levels. Shorter-term technical support lies at
the overnight low of 118.24.0 and then at 118.20.0. Sell
stops likely reside just below those levels. Wyckoff’s
Intra-Day Market Rating: 6.0
U.S. DOLLAR INDEX
The December U.S. dollar index is higher and hit a three-
week high in early U.S. trading. A five-week-old downtrend
on the daily bar chart has been soundly negated. The
shorter-term moving averages for the dollar index are
neutral early today, as the 4-day is above the 9-day. The 9-
day is below the 18-day moving average. Short-term
oscillators for the dollar index are bullish early today.
The dollar index finds shorter-term technical resistance at
95.000 and then at the September high of 95.280. Shorter-
term support is seen at the overnight low of 94.550 and then
at 94.000. Wyckoff’s Intra Day Market Rating: 6.5
NYMEX CRUDE OIL
November Nymex crude oil prices are near steady and not far
below Tuesday’s contract high in early U.S. trading. The
bulls have the solid overall near-term technical advantage.
The shorter-term moving averages are bullish early today as
the 4-day is above the 9-day and 18-day. The 9-day is above
the 18-day moving average. Short-term oscillators (RSI and
slow stochastics) are bullish early today. Look for buy
stops to reside just above technical resistance at the
contract high of $72.78 and then at $73.00. Look for sell
stops just below technical support at this week’s low of
$71.14 and then at $70.00. Wyckoff’s Intra-Day Market
Rating: 5.5
GRAINS
Grain futures prices were steady to narrowly mixed
overnight. Grain market bears still have the overall near-
term technical advantage, but corn and soybean prices look
like they have bottomed out. U.S. corn and soybean harvest
pressure is under way at full speed, so look for farmer
selling pressure to limit the upside. Traders are awaiting
this morning’s USDA quarterly grain stocks projections.
IMPORTANT NOTE: I am not a futures broker and do not manage
any trading accounts other than my own personal account. It
is my goal to point out to you potential trading
opportunities. However, it is up to you to: (1) decide when
and if you want to initiate any traders and (2) determine
the size of any trades you may initiate. Any trades I
discuss are hypothetical in nature.
Here is what the Commodity Futures Trading Commission
(CFTC) has said about futures trading (and I agree 100%):
1. Trading commodity futures and options is not for
everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS.
Before you invest any money in futures or options contracts,
you should consider your financial experience, goals and
financial resources, and know how much you can afford to
lose above and beyond your initial payment to a broker. You
should understand commodity futures and options contracts
and your obligations in entering into those contracts. You
should understand your exposure to risk and other aspects of
trading by thoroughly reviewing the risk disclosure
documents your broker is required to give you.
Jim Wyckoff
